PACS:
1. n. (acronym)Picture Archiving and Communications System. A device or group of devices and associated network components designed to store and retrieve medical images.
2. n. (acronym)Pain And Constant Suffering.

Monday, May 17, 2010

The Call

The call from Merge finally came on Friday, a bit later than I would have expected, but then it seems I was never really visible on the Merge radar. But since I recently became a valued (and vocal) Merge customer, I was given a chance to speak with Nancy Koenig, now Executive VP of Direct Sales for Merge. One has to wonder if this was a lateral move for Ms. Koenig, who until recently was President of Merge Fusion. Is it better to be President of a division or EVP of a bigger division? In any case, she has risen steadily through the ranks, having started at Click with what is now the Merrick team . Also on the call was Kurt Hammond, whom I know very well from the AMICAS days. Kurt was involved in my initial AMICAS purchase, and I'm sure he'll be punished adequately for that. My friend Mike Cannavo, the One and Only PACSMan, was also in on the call. He covered financial issues, and you can expect his write-up shortly.

Let me say at the outset that I was very impressed by what I heard on this call. I come away with a far greater comfort level that AMICAS PACS will survive, and hopefully prosper. Clearly, the path it takes will be different than we would have seen had the Thoma Bravo deal gone through. The scope of its future will without question be larger than before, and I can only hope that the new trajectory is better than the old might have been. Only time will tell.

Ms. Koenig outlined a very ambitious course for Merge Healthcare. In essence, Merge plans to be a player, and a big one, in the health care IT market, with a fairly immediate goal of making imaging in general, and PACS in particular, part of the "meaningful use" aspect of the EHR. (My cynical translation: PACS users need to get the proper share of the EHR incentives as defined by the mainly GE-born CCHIT folks. We might as well!) The Merge acquisition of AMICAS is felt (by Merge at least) to be more of a merger (no pun intended) than a purchase. Ms. Koenig noted that Merrick Ventures has a history of taking swift action to turn the companies it acquires back to efficiency and profitability. They certainly did bring Merge itself back from death's door.

Merge wants ultimately to empower patients, giving them greater control (within reason!) over their own records, and its mission is to bring change to the field which will allow this to happen. The company plans to continue exploration into many areas such as billing, patient kiosks, and of course, remote access as demonstrated by Mobile eFilm.

But let's cut to the chase. Most of my readers are probably quite curious, if not altogether petrified, about the fate of AMICAS PACS, and so am I. There appears to be good news on this front. First and foremost, the go-forward product is to be AMICAS PACS. This certainly makes sense, as it is the flagship product of the company Merge just bought for $250 million. If you were to buy a PACS from Merge today, it would be AMICAS PACS Version Six, MR2.

But keep in mind, Merge now owns three separate and disparate PACS: AMICAS PACS, Emageon RadSuite, and Merge Fusion/eMed Matrix. (I'm going to be a snob and not count eFilm, which is a powerful but kludgy viewer with a rather primitive GUI, and not a PACS.) The plan for the future is to combine the best of all three into Version 7, which I guess will still be named AMICAS PACS, although I wouldn't be surprised to see it called Merge PACS. (I would strongly recommend dropping the names Fusion and Matrix.) From AMICAS will come the bulk of the GUI for this new product, with the Halo viewer that represents a small piece of my soul, as well as the Real Time Worklist, integrated mammography, and embedded 3D functionality. From Emageon will come the ECM, the Enterprise Content Management back-end, a Vendor Neutral Archive (VNA) which can handle Radiology or Cardiology, or any other 'ology, at least in theory. It was probably one of the main reasons AMICAS purchased Emageon. (If you look here, you will see the early forms of a hosted, offsite VNA, which could be the origins of a cloud PACS, and indeed Ms. Koenig told us Merge is pursuing something like this.) From Matrix comes instant messaging, and maybe a 64-bit architecture. Version 7 will be the upgrade path for customers of all three legacy PACS. So far, so good. When will Version 7 be released? Good question.

I was rude enough to point out GE's failure (as far as anyone can tell) in accomplishing the backend swap of Centricity Linux in hopes of using it with the IntegradWeb GUI, and I voiced fears of a similar disconnect when Merge actually attempts to graft AMICAS onto the Emageon ECM. Ms. Koenig's response? "GE is not a software company." This might be news to GE's PACS division in Chicago, and the good people at BDM, but I'll let them worry about that. Merge is definitely a software company.

The Merge Enterprise Master Patient Index will be incorporated into the product, although I'm not certain if this is to go with Version 7 immediately or not, which will pave the way for better enterprise integration across multiple sites, a federated hub and spoke system as Ms. Koenig called it.

Finally, let's talk about the elephant wearing the DOCTOR DALAI T-shirt in the corner, i.e., the loss of the AMICAS PACS developers and the fuss I made over this. Merge's philosophy about, shall we say, non-traditional office practices is quite clear. Companies can get too spread out, with too many people in too many places. For efficiency, people need to be brought back together, and should work in closer proximity. In other words, having developers in remote locations is not felt to be optimal. The unspoken followup is of course, that this is why the AMICAS developers were let go. Paradoxically, some of the V6 team working out of India will stay on, from India. Ms. Koenig acknowledged that Merge's developers would have to step into the roles, although she expressed confidence that this could take place. I thanked her for Merge's willingness to reverse their policy and offer my guys their jobs back on their own terms (although by that point it was too late).

I hope my friends will forgive me, but I offered up my services, and those of the old Advisory Board members who are willing to participate. From my point of view, this is a totally selfish and self-serving move on my part. I own and use an AMICAS PACS. It has to be supported and developed, or my investment of time and my partner's money will go down the drain, and my name will be mud (on a good day). For the sake of my patients, this product has to carry forth into the future. Have I sold my soul to Merge? Not bloody likely, but right now, their expressed aims are parallel to mine, and they are the best game in town. As I come to know the parties involved (I need to get to Chicago ASAP to meet them!) I hope to develop the same trust and admiration for them as I have for my friends from AMICAS, past and present. Merge, as run by Merrick Ventures, and Mr. Ferro's colleagues, will be a very different company than the AMMICAS I knew. Think Ben and Jerry's getting bought out by a big name like Breyer's. The ice cream might still be as good, and maybe even better, but the feeling is different.

If Merge can deliver on the vision as expressed by Ms. Koenig, we'll all be in pretty good shape. Time will tell.

They are forcing more than just engineers to move. They are asking just about everyone to pick up and move to Chicago. A good friend that does a typical "travel" type of job, was told they had to move. They will be bailing shortly... Wonder if there will be corresponding cost of living pay increases...and will those moves be paid?

1) Ferro wants to control this very company very closely, which is pretty much what you were told on the call.

or

2) The new Merge is being "pre-configured" to become part of Allscripts, and that this is being done to make the Merge-to-Allscripts transition less complicated.

BTW: aside from Ferro and Tullman, there is yet another power behind the throne. This is a guy named Mike Lawrie, who is CEO of Misys. Misys controls Allscripts, and Misys is controlled, in turn, by a San Francisco investment company called ValueAct capital. Lawrie was previously a partner at ValueAct.

The ValueAct guys (Lawrie and VA founder and CIO Jeff Ubben) are the proverbial "smartest guys in the room" when it comes to HCIT. They have made several very profitable investments in the sector.

As with anything Tullman and Lawrie do, there is a grand plan. Just don't know exactly what it is at the moment.